The Price Risk Facility addresses the challenge of price volatility in agriculture, which significantly impacts the financial stability of smallholder farmers and agribusinesses. The Facility aims to increase access to finance and reduce the risks faced by vulnerable groups while tackling post-harvest losses. It provides financial security by allowing recipients to invest in climate-smart practices and technologies, leading to increased productivity, improved livelihoods, and resilient food systems. 

Price volatility has big consequences for smallholder farmers and agribusinesses, creating income instability and limiting their ability to invest in climate-resilient practices. Farmers and agribusinesses struggle to access affordable financing without reliable tools to manage price risks. Financial institutions view the agricultural sector as high-risk, leading to restrictive lending patterns that limit crucial investments in sustainable climate-smart agriculture, stemming growth and resilience across the sector. 

The Facility embeds downside price insurance into crop loans, protecting smallholder farmers and agribusinesses from market volatility. It also leverages a first-loss risk pool to reduce insurance premiums further, covering a portion of the first loss. This makes price insurance more affordable for smallholders, while insurers benefit from increased revenue. The structure also incentivizes sustainable practices, supporting a resilient, climate-smart agricultural sector.   

Agtuall’s solution aims to stabilize the incomes of some 100,000 smallholder farmers by 2026, with a 15-20% income increase. This improves climate resilience by reducing income volatility, enabling investment in climate-smart practices. The model targets crops like red chili, coffee, and maize in India, Kenya, and Uganda, promoting sustainable agricultural practices, reducing emissions from post-harvest losses, and enhancing food security while aligning with national resilience goals.